This is what you need to know to trade today Wednesday 29 September:
Markets are trying to rebound and the dollar is retreating slightly from its highs after a strong risk aversion Tuesday. Concerns about rising bond yields, power outages in China and the looming debt ceiling crisis continue to weigh on the markets. The focus is on these issues and appearances by central bankers.
Bonds: 10-year US Treasury yields hit 1.56% on Tuesday, an extension of the reaction to the Federal Reserve’s signal that it would cut its bond-buying program and as inflation fears continue to prevail. Higher yields on safe US debt resulted in a sale of tech stocks and a rise in the dollar.
The EUR/USD remains below 1.17 and the GBP/USD it is trading around 1.3550, barely rebounding after hitting the lowest level since January. The oro it fell well below $ 1,750. The non-yielding precious metal succumbed to rising Treasury yields.
Fed Chairman Jerome Powell He testified before Congress, repeating his position that inflation has risen more than expected and that his employment threshold to start tapering has been “almost met.” Powell, who faces opposition on his re-election, will speak again on Wednesday alongside his UK and European colleagues.
Debt ceiling: Treasury spokeswoman Janet Yellen warned that the United States would reach the current debt limit by October 18, causing a default and a financial crisis. Efforts to suspend or elevate the law have so far failed.
EnergyChina is working to ease electricity demand and avoid power outages that disrupted industrial production in the Northeast. Concerns about the impact of this crisis on the world contributed to the bleak mood.
Evergrande: Beijing continues to grapple with Evergrande’s large outstanding debt. The country’s second-largest real estate developer will lose more debt payments, but fears of a broader financial crisis have eased.
Japanese leadership: Former Foreign Minister Fumio Kishida won the leadership in Japan’s LDP party and will become prime minister in the next few days. He is considered a moderate and has experience in various positions.
Brexit: France and the UK are clashing with fishing licenses in a repeat of an earlier showdown. The Northern Irish protocol remains persistent. In addition to the strong dollar and Brexit problems, GBP / USD continues to suffer from shortages at gas stations in various parts of Britain. Upbeat comments from Bank of England Governor Andrew BAiley did little to raise the pound. Bailey speaks again on Wednesday.
European Central Bank: President Christine Lagarde he will speak alongside Powell and Bailey later in the day. On Tuesday, Lagarde ignored concerns about inflation. Investors await news on the magnitude of the ECB’s bond purchases.
cryptocurrencies: Bitcoin is trading around $ 42,000, Ethereum is below $ 3,000 and ADA is around $ 2.10. Digital asset values ​​fell on Tuesday and are rebounding on Wednesday, in a reaction correlated with broader markets.
Monetary flows: The third quarter ends on Thursday and capital managers could begin to adjust their portfolios as early as Wednesday, which could cause nervousness in the markets.
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